Nature of the Case
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Facts
Dixon (P) and the Salvation Army (D) entered a real estate purchase and sale agreement. D agreed to sell P two parcels of land both improved with commercial structures. An escrow was opened, and the instructions were later amended to reduce the sales price from $1.1 million to $900,000 because the parties discovered that one of the properties had structural defects. Before escrow closed and before either title or possession passed, one of the two buildings was destroyed by fire. D got $240,000 from insurance proceeds, and it was immediately apparent that D was significantly underinsured. The contract provided that D deliver the lands and buildings in the same general condition minus normal wear and tear as it was in when it was inspected before the opening of escrow. The parties could not agree on a new price for the transaction, and P sued. D. P sued for abatement and specific performance. D wanted the contract rescinded or enforced without abatement.
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